ISLAMABAD, Sept 30 (APP): The International Monetary Fund (IMF) Mission Chief to Pakistan, Harald Finger has expressed the hope that Pakistan’s economy will set on a new and sustainable course, breaking from past cycles of near-crises and aborted stabilization programmes.
“With stronger buffers, improved sentiment, gradually recovering growth, and the prospects of more energy supply and an additional impetus from the China-Pakistan Economic Corridor (CPEC), there is hope that Pakistan’s economy will set on a new and sustainable course,” he wrote in an article published in English daily.
The IMF Mission Chief termed the completion of three-year Extended Fund Facility (EFF) Programme by Pakistan as a notable achievement.
“This a notable achievement in itself, but particularly so for a country that has had to resort to IMF support regularly and often abandoned its reform programmes before completion,” he wrote.
He said that just three years ago, Pakistan’s economy was running out of steam and resources, however with the oil windfall and an improving external sentiment, Pakistan was able to triple its foreign reserves buffer, through SBP foreign exchange purchases and foreign borrowing which has much strengthened Pakistan’s shield against economic shocks.
Significant headway has been made under this programme, he said adding, a lot also remains to be done to put the economy on a more resilient footing and create conditions for more job creation and higher living standards for wide segments of society.
He said that to make it a success, there needs to be consensus that economic reform needs to be an ongoing process and difficult reforms that have been embarked upon need to be completed.
While a lot of progress has been made in strengthening Pakistan’s economic resilience, more is needed to adequately prepare Pakistan for future economic shocks.
Continuing to build international reserve buffers will be important given future debt repayment obligations and contingent liabilities, helping to safeguard against risks to exports, remittances, oil prices, and international capital flows.
In addition, sufficient exchange rate flexibility will be needed to support the competitiveness of the export sector and contain the trade deficit.
There is also a need to continue pursuing reforms to strengthen Pakistan’s growth potential and ensure that the gains in living standards are widely shared across society.
Swift progress on the economic policy agenda will be needed to create an environment in which a dynamic private sector can generate sufficient jobs to absorb new labour market entrants and where living standards improve for wide segments of society.
He said that achieving all this will take time and effort and will also require a national consensus on the country’s priorities.